Despite being high on its fourth-quarter results last week, JD Edwards & Co Inc did not lose the sense of pragmatism that has been a mark of the company since Bob Dutkowsky joined as CEO, and this week warned of a flat first quarter. However, rather than depressing the market, its sensible expectation management gave financial analysts the confidence to maintain it as a strong buy.
The company said the outlook for 2003 will be tough because of the lack of low hanging fruit in its target mid-market sector, but said it is in a good position to take what business is available. Trevor Salomon, marketing director of JD Edwards EMEA, said its known mid-market focus will continue to save it, while incomers to the market will have a rude awakening.
He pointed to the fact that the mid-market is such a different space compared to the high-end market, and that where the Oracles of the world are used to selling on an IT ticket through the IT department, in the mid-market vendors need to sell to the business requirement. Having set out their stall based on a complex message, he said they are now faced with the challenge of having to craft a new message based on the same technology for the mid-market.
In Salomon’s view, the battle for the mid-market will not be fought on functionality grounds but on the more nebulous area of reputation. In the immediate future, he said the company plans to continue with the strategy that has served it well recently, which is pragmatic business management that prioritizes customers over product. [Customers are] buying solutions to business problems and if there are no business problems they are not buying, he said. The company also plans to maintain its focus on micro management, whereby it matches forecasts to costs on a weekly basis and realigns as necessary.
Like all software vendors, the Denver, Colorado-based company is selling to its installed base, but is also looking to maturing markets such as the Gulf countries, and emerging markets like China and India for new business opportunities. Although it is not naming names, it is also opportunistically looking to pick up business in areas or vertical industries where vendors have established themselves but no longer have the R&D funds to continue to drive deeply into the various sub-sectors, indicating that it will be driving deep into selected verticals.